RILA Welcomes House Hearing on Organized Retail Crime Legislation

Federal Legislation Will Protect Consumers

Arlington, VA - 8/26/2009

The Retail Industry Leaders Association (RILA) welcomed news today that a congressional hearing to consider federal organized retail crime legislation will be scheduled for the fall. Rep. Robert C. “Bobby” Scott, Chairman of the House Judiciary Subcommittee on Crime, Terrorism and Homeland security announced that his committee will hold a hearing in the fall to address this important issue.

Organized Retail Crime involves sophisticated criminal networks made up of many individuals who steal large quantities of goods from retailers and sell the goods for profit though pawn shops, flea markets and increasingly on the Internet. Experts estimate organize retail crime losses in the tens of billions of dollars annually.

“RILA thanks Chairman Scott for his commitment to protecting consumers and retailers victimized by this criminal activity,” said John Emling, senior vice president for government affairs. “This hearing represents an important step forward in the fight against organized retail crime.”

The hearing will focus on two bills currently under consideration in the House of Representatives.

The E-fencing Enforcement Act of 2009 (HR 1166), introduced by Chairman Scott, would impose reasonable duties on online marketplaces when there is good reason to believe that items listed for sale were acquired unlawfully.

The Organized Retail Crime Act of 2009 (HR 1173), introduced by Rep. Brad Ellsworth (D-IN), which modifies the federal criminal code to include ORC activities, and makes the facilitation of ORC a crime. The legislation also imposes practical reporting requirements on the operators of online marketplaces and sellers when goods are suspected of having been acquired through ORC.

Organized retail crime puts consumers at risk when stolen goods are mishandled or altered in ways that jeopardize the safety of end users. In most cases, consumers are unaware of the unlawful source of the products purchased from anonymous sellers. This is of particular concern when sensitive items such as baby formula, diabetic test strips and over-the-counter medicine is involved. Recent investigations have uncovered sensitive health and beauty items stored at high temperatures damaging the safety and reliability of the product.

Organized retail crime has grown as criminals have exploited existing laws to avoid prosecution. Federal legislation that clarifies federal criminal statutes will limit criminals’ movement and access to unsuspecting buyers.

A survey conducted by RILA earlier this year showed continued growth in ORC activity in the U.S. 72% of respondents reported an increase in ORC in the first four months of 2009.

“Real solutions to the ORC problem, such as those proposed in the bills under consideration, are needed to stop growth of this criminal activity and to protect unsuspecting consumers from the harm it can cause,” said Casey Chroust, rila executive vice president for retail operations.

Chairman Scott announced the hearing Thursday before an audience of loss prevention professionals attending the Annual Virginia Retail Loss Prevention Conference in Norfolk, VA.

The Combating Organized Retail Crime act of 2009 (S. 470), introduced by Sen. Richard Durbin (D-IL) is under consideration in the U.S. Senate.

RILA is the trade association of the largest and most innovative companies in the retail industry. RILA member companies include more than 200 retailers, product manufacturers, and service suppliers, which together account for more than $1.5 trillion in annual sales. RILA members operate more than 100,000 stores, manufacturing facilities and distribution centers, have facilities in all 50 states, and provide millions of jobs domestically and worldwide.

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Brian Dodge
SVP, Communications & State Affairs
Phone: 703-600-2017
Email: brian.dodge@rila.org